Why is the Airbnb Entire House Pricing per Guest?

Airbnb's pricing model for entire homes often varies based on several factors, including the number of guests, the type of property, and the host's preferences. Here are some reasons why entire house pricing might be structured per guest:

Cost Recovery

Hosts may price their listings based on the number of guests to ensure they cover the costs associated with hosting. This includes utilities, cleaning, and maintenance. For example, every additional guest may use more water, electricity, and additional bedding and towels, leading to increased expenses. Pricing per guest helps hosts recover these costs more efficiently.

Value Perception

Pricing per guest can help clarify the value of the accommodation. Pricing structures that reflect the actual usage make the offering more appealing. Larger groups may be willing to pay more for a whole house compared to smaller groups, making it a more attractive option for families or groups of friends. This pricing strategy can also account for the increased benefits of having a whole property, such as more space and privacy.

Market Demand

Hosts may adjust their pricing based on demand in their area. In popular tourist destinations, charging per guest can maximize revenue when demand is high. This strategy allows hosts to take advantage of peak periods and manage their occupancy effectively.

Encouraging Longer Stays

By pricing per guest, hosts can encourage larger groups to book for longer periods. Offering a better deal for longer stays can be a competitive advantage, as it provides a more attractive option compared to booking multiple smaller accommodations. This can lead to higher overall revenue and a more stable occupancy rate for hosts.

Fairness

This pricing model can be seen as fair for both guests and hosts. Guests pay according to the size of their group, and hosts receive compensation that reflects the number of people using the property. This transparency and fairness can lead to a better guest experience and more positive reviews, which can attract more bookings in the long run.

Competitive Advantage

Pricing per guest can help listings stand out in a competitive market. With flexible pricing strategies, hosts can attract a broader range of travelers, from solo travelers to large groups. This can be particularly valuable for hosts in areas with diverse tourism patterns.

Airbnb’s Role in the Pricing Model

Airbnb acts as a booking agent. They list the property as the host presents it, take the booking, manage all payments, and take a percentage cut of all payments. Airbnb does not “charge fees,” but the pricing is determined by the host based on the usage.

For example, if a host prices the property as follows:

The increase in price per person is often to cover increased usage, such as more water, electricity, and additional bedding and towels. Every bedroom typically requires one load in the washer, and each bathroom may require another load or two, more if there is a hot tub or swimming pool. Cleaning can take 1 to 2 hours per load, depending on drying time, which is a significant amount of time. It is fair that guests pay for the amount of clean-up needed.

Not all hosts charge by the per person model. Mine, for example, do not. However, I rarely get people going over my max guest limit, and this is because the expense goes up exponentially by the number of people.

Understanding these factors can help both hosts and guests make more informed decisions about pricing and accommodation options. By transparently pricing based on guest numbers and usage, hosts can optimize their earnings, and guests can find the best deals for their needs.